Reeves announced a package of savings to the welfare bill which will hit more than three million families. She had hoped the changes announced last week would generate about £5bn in savings per year by the end of the forecast period, but official forecaster the Office for Budget Responsibility (OBR) contradicted the Government’s overly optimistic assessments and refused to “score” many of the proposed changes, claiming that the Treasury had not provided sufficient detail about the policy proposals.
The administration hopes that scaling back a ballooning health and disabilities benefits bill will encourage more people into jobs and paying taxes rather than relying on state support. But ever since ministers began to put the “moral case” for cutting spending on UK benefits, emotions have been running high. The argument that Labour is “the party of work” and has a duty to reduce welfare costs has left some in the party furious, and others exasperated at that fury.
The chancellor did her best to frame the narrative. “The world is changing,” she told the House of Commons, in reference to the global market turmoil caused by the chaos of US President Donald Trump. She argued that the anaemic growth forecasts were evidence of the need to double down on her plans and go further and faster in the pursuit of reform and growth by building more homes and accelerating spending on defence.
“Many of the people I know with MS need the PIP to help them stay in work. It just doesn’t make sense that the Government cuts this money; people will no longer be able to work, and more people will be claiming benefits. These are not wastrels; these are not ne’er-do-wells. These are people who want to make a difference,” he told The i Paper. “I had to go to appeal to get my PIP claim, and it caused an enormous amount of stress. It would be brilliant if there was a lifelong cure for MS but there isn’t. It’s progressive, and it’s getting worse. PIP is a lifeline.”
The evaluation showed a quarter of a million people, including 50,000 children, will be pushed into relative poverty. About 800,000 people will lose out on PIP, with individuals set to lose an average of £4,500 a year by 2029-30. The figures show about 370,000 people who are currently in receipt of disability benefits will no longer get them when they are reassessed, while close to half a million future claimants will no longer be entitled to them as well. Meanwhile, around 2.25m people currently in receipt of universal credit will be impacted by the freeze on rates, losing on average £500 a year.
Labour MP Debbie Abrahams, who chairs the Work and Pensions Committee, asked Reeves, “How will making people sicker and poorer help in terms of driving our economy up and people into jobs?”
“There is nothing progressive, there is nothing ‘Labour’ about not supporting people who are disabled and sick and young people to do jobs that are commensurate with what they are able to do.” She said one in eight young people had been “effectively written off” by the Conservatives in Government, and ministers were consulting on an additional premium for the sickest and most disabled, she added.
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Labour MP Rachael Maskell said she recognised the importance of fiscal responsibility before adding: “However, as a Labour Party we’ve got an additional responsibility around having social responsibility.”
The calls for a wealth tax to avoid reductions are now coming thick and fast. Left-winger Richard Burgon dubbed the welfare changes a “cruel choice,” adding, a wealth tax would be “a braver option.”
John Stainton, listening to his radio in Hampshire, said he can see the case for increasing defence spending. He joked that perhaps a role can be found for him in Britain’s prospective defence force in Ukraine. But he’s still alarmed by what he heard on Wednesday.
The frantic search for further welfare savings has undermined the carefully pitch-rolled moral case for the cuts. Like other disabled voters, Stainton will be waiting to see if Labour MPs dare to stand up to Reeves and rebel.
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